Former President Olusegun Obasanjo has expressed apprehensions regarding the future of debt relief for Nigeria and other African nations, citing their substantial debt profiles. Speaking at an event with awardees of the Future Africa Leaders Foundation, Obasanjo disclosed that the debt relief secured by Nigeria during his tenure was allegedly mismanaged by subsequent administrations, leading to the country’s current significant and undeserved debt.
As of September 2023, Nigeria’s public debt stands at N87.91 trillion, according to the Debt Management Office. Obasanjo warned that the mismanagement of previous debt relief efforts could jeopardize the chances of future generations benefiting from such gestures.
In 2003, during Obasanjo’s presidency, Nigeria secured debt relief from the Paris Club, culminating in an $18 billion agreement and an overall reduction of the country’s debt stock by $30 billion. However, the former president lamented that the mismanagement of this relief has created a challenging landscape for debt management.
Obasanjo emphasized the importance of avoiding the debt trap, describing it as a pitfall that individuals and countries should steer clear of. He highlighted leadership as the continent’s primary challenge and expressed concerns about future generations being burdened by the current debt levels.
Commending Pastor Chris Oyakhilome for fostering leadership through the Future Africa Leaders Foundation, Obasanjo emphasized the need for leaders to set good examples, make bold decisions, accept mistakes, learn from them, and have realistic dreams.
In a related development, Obasanjo conveyed hope for Nigeria’s socio-economic improvement in the next four years, provided there is dedication to prayers and thanksgiving. Speaking at the Christian Association of Nigeria Ogun State’s 5th Thanksgiving service, he acknowledged the challenging current situation but urged gratitude for the potential positive changes.
Despite the challenges of debt, Nigeria’s Minister of Finance, Wale Edun, has recently expressed the government’s commitment to shifting focus from borrowing to revenue. Economists, however, attribute the re-accumulation of debt to poor fiscal management and advocate for prudence and moderation in government expenditure.
Experts also note that debt sustainability is a significant risk to the Nigerian economy, emphasizing the need for fiscal consolidation and reforms to address the legacy of debt accumulation.
In response to Obasanjo’s comments, economists and university professors criticize the Federal Government for reaccumulating large debt after the efforts made during Obasanjo’s presidency. The challenges are seen as a result of poor fiscal management, a global economic downturn, and a legacy of accumulated debt.
While the former president’s concerns highlight the importance of fiscal responsibility and effective management of debt relief, experts stress the need for specific actions to address the issues and prevent further economic challenges.